Climate Risk, Safety Nets, and Household Welfare

This blog focuses on our Fieldwork in Tigray in 2010, which was the fifth round survey to the same 15 communities in the region. Students in our joint Master Program in Development and Natural Resource Economics with four African universities (Mekelle University and Hawassa University in Ethiopia, University of Malawi, and Makerere University in Uganda), funded by NORAD, carried out the fieldwork and will use the data for their MSc-theses. In addition PhD-students and staff use the data in their reseearch on a range of policy issues related to climate risk, land management, land law reforms, food security and safety nets, and household behavior and welfare.

Wukro woreda is considered as one of the most food insecure woredas in Tigray and all its 18 tabias have been included in the Productive Safety Net Program. It is also one of the areas with highest level of poverty in our data.

This information was obtained early June 2010 from the Tabia administration in Genfel Tabia, located 1-2 km from Wukro woreda centre. The tabia has irrigation and is therefore better off than some of the other tabias in the woreda and has good market access. The tabia has 1333 households of which 464 are female headed and a population of 8640. Out of these 5040 participate in the Productive Safety Net Program (PSNP). In addition the tabia has also received additional assistance from the emergency (earlier called OFSP) Risk Financing food security program the last four years. 830 individuals got this type of assistance last year, giving 5870 individuals receiving support from the two safety net programs. The number of months of support has varied from 6 to 8 months for the PSNP and was 8 months last year and is 6 months this year.

Most of the assistance is provided through Food-for-work. Last year 2 out of 8 months of assistance was Cash-for-work. The tabia has 25 households that have graduated from the PSNP, out of which 2 are female headed. 247 new individuals have now been added to the program. 59 households have applied for the new Household Package Credit program. This is credit for 5 years for amounts between 5 000 and 15 000 Birr. Out of these, 42 have been granted loans. These loans are for irrigation pumps, dairy cows or other livestock and bee hives. The interest rate in DECSI is now 18%. Over the last years the number of households taking these 5 year loans has varied from 97 to 328 households per year, except in 2009 when only 7 households obtained the loan due to supply constraint. We were also informed that DECSI has stopped providing group loans but there is a church organization (St. Mary’s Catholic Church Aid) providing such loans without interest.

In the safety net program males are allowed to work for maximum 4 persons while female are allowed to work for maximum 3 persons. A household with two males and one female labor force can therefore work for maximum 11 family members. On the other hand, a household with only a single female labor unit and a family size of 6 will have to work of 3 persons but will still obtain food for all the 6 family members under the new PSNP rules. According to the Tabia Manager it is not a requirement that households have to do their compulsory free labor before they get the PSNP benefits. In the past it was common to require the completion of the free compulsory labor requirement before participation in FFW and CFW was allowed.

The tabia has already implemented the increase in compulsory free labor contribution from 20 to 40 days per year per adult person. Persons up to an age of 70 years are required to meet this obligation and they need a medical reason for not to do it. Even household members partly living outside the community but who still have their land in the community are expected to do their compulsory contribution. The same is the case for persons in the community who have other obligations like member of the Land Administration Committee etc. According the Tabia Manages 80% of this work has been on soil and water conservation while a relatively small share has gone into irrigation, school, health, roads and tree planting investments. We observed groups working on building gully control (see pictures).

The tabia has 1286 ha arable land (500 ha good quality, 476 ha medium quality and 310 ha poor quality), 1035 ha communal land, out of which 191 ha are forest and 844 ha protected area for regeneration. This gives close to 1 ha arable land per household.

Activity updatePosted by Stein Holden Thu, June 10, 2010 17:25:22Productive Safety Net Programs (PSNPs) have so far prioritized investments on public lands. Their other intended effects were to protect beneficiaries from distress sales of their assets and build-up of assets such that they could graduate from the program. After the first 5 years a very low share of the households in the program in Tigray has graduated. Some believe this is because the households have incentives to stay in the program and therefore are unwilling to make investments such that they would graduate. We see, however, that the areas with most graduation in Tigray are areas with irrigation and good soils. One may therefore ask whether the PSNP has been too unproductive and could be made more productive by investing more on private land?

Our baseline survey in 1998 showed that the majority of households perceived the land degradation problem to be largest on private lands. The most important reason for too little investment in conservation on private land was stated to be lack of labor. Could therefore the high level of labor mobilization for conservation of communal lands have a negative effect on investments on private land?

More fundamentally, do households in Tigray have sufficient incentives to invest on their private lands? Our research has shown that the provision of land certificates has enhanced tenure security, maintenance of conservation structures and land productivity on private lands. But could there still be underinvestment on private lands? Our 1998 baseline study gave several important reasons why public investments on private lands may make sense. First, soil and water conservation requires technical skills in technology design. Second, implementation requires coordination across farms as spatial externalities are substantial and can lead to conflicts. Third, labor mobilization is important to ensure equal treatment across farms and leads to labor transfer from labor-rich to labor-poor households that otherwise may have failed to conserve their land.

The new Land Laws (proclamation and regulation) aim enforce sustainable land management and the new 2nd Stage land certificates also state the obligations of the owners. Law enforcement may be difficult in this area, however, and has not yet been implemented. Implementation could make labor-poor households tenure insecure. It may be better to use the PSNP labor to help conserve the land of such households. If more PSNP labor is also directed towards irrigation investments where there is irrigation potential this could also help more households to reduce their dependency on the PSNP.

Activity updatePosted by Stein Holden Thu, June 10, 2010 17:24:03A unique feature in the Tigray region is the mobilization of free labor at community level. The amount of work that each adult between 18 and 60 years has to provide has recently been increased from 20 to 40 days per year. This may be seen as a tax on the labor force of the households. It implies that labor is taxed at a flat rate and that labor-rich households pay more tax than labor-poor households do. If all households benefit equally from the work done through this mass mobilization scheme, it has an equalizing effect of reallocation of resources from (labor) rich to (labor) poor households.

Most of the labor mobilized has been invested in soil and water conservation. This may also be seen as a Pigouvian tax to address the environmental problems in the region. Labor is one of the most abundant resources in developing countries. Mobilizing idle labor for investment in public goods may therefore be a cheap and good way to enhance welfare and sustainable land management and even contribute to building of skills and reduce crime rates.

In our baseline survey in 1998 when 20 days per year was the standard, 70% of the respondents were highly motivated to participate in this work and only 6% stated that the motivation was low. 62% stated that the 20 days per year was a suitable level of the labor requirement, while 10% stated it was too low, and 8% that it was too high.

It is possible however that this activity is at the expense of other household activities even though it is carried out outside the main agricultural season when other activities are at a low level. In our 1998 survey 44% of the households stated that the labor mobilization was affecting domestic work, 37% stated that it became more difficult to look after their animals, and 14% that it affected their business activities. Such effects are likely to become stronger when the labor requirement is doubled.

A lot of labor is currently being invested in conservation of public lands in Tigray and the impacts are very visible. The environmental rehabilitation is impressive considering the semi-arid climate. An important question is, however, whether more of this labor could have been invested on the private land to enhance sustainable land management and productivity there. In 1998 we found that 25% of the households had been mobilized to conserve private land and these decisions/priorities were made locally. Under the current PSNP these decisions are made centrally and all the labor is used to conserve public land. In our 1998 survey we also found that 81% of the respondents considered the land degradation problem to be largest in the private land while 28% stated that it was largest in the communal land (implying 9% perceive it equally important in the two types of land). There may therefore be good reason to question the priorities under the PSNP program.

The students have now split up in three groups and are surveying three of our sites in Eastern zone in Tigray around Wukro. Each team consists of 5-6 students and 6 enumerators. In each group two of the enumerators collect basic household economy data, two collect farm plot level data including measurement of plots, and two collect health data and knowledge and perception data related to the recent land law reform. In addition we make interviews with different tabia officials using a village level questionnaire, interview Land Administration Committee members about their knowledge of the law and implementation of the new law. We also interview the local representatives for the Productive Safety Net Task Force, the credit and savings institution (DECSI), and local producer cooperative, and judges from the local Social Court and local Land Court. We have develop a guidline for the teams as a checklist to ensure uniformity in approach and data collected.

Today we have also started the data entry and have hired three data entry persons and have two students to will participate in, supervise and monitor the data entry. The aim is that data entry should be made with the same speed as the data collection such that it will be completed soon after the data collection and by the end of July. We have a room in Mekelle University for this. We have also developed a guideline for data entry to ensure data quality and minimize the need for data cleaning later.

Activity updatePosted by Stein Holden Sun, June 06, 2010 07:54:17Our research on land rental markets and impacts of land registration and certification and land law reforms in Ethiopia (see www.steinholden.com/...) has shown that it is particularly poor female-headed households (landlords) that rent out their land to wealthier male-headed (tenant) households. This reverse tenancy system with poor landlords and less poor tenants has important policy implications. In our research we have found that land certification has strengthened the tenure security particularly of female-headed households and they have therefore become more willing to rent out their land and this has also enhanced the efficiency of land use as land is operated by more efficient land users. This is an example of a good policy that has had win-win effects improving efficiency and equity as we have found that the welfare improvement impact has been largest for female-headed households who get higher returns and higher food security from renting out their land (through sharecropping) than from trying to farm it themselves.

A new restriction on how much land to rent out was introduced in the new laws in Ethiopia in 2004-06, such that households were not allowed to rent out more than 50% of their land. We saw from our data that a large share of landlord households, and particularly poor female-headed households rented out more than 50% of their land. In our papers and feedback to policy makers in Ethiopia we warned against this new restriction and said it would be bad both for efficiency and equity and would particularly harm poor female-headed households. It is therefore now encouraging to see that here in Tigray Region, although this restriction is still stated in the law, it has not been enforced unlike some other elements of the law.

Another requirement in the new laws was that all land rental contracts should be registered at the tabia/kebelle (municipality) level, including all sharecropping contracts. In our surveys in 2006-07 we investigated household perceptions and opinions about this and based on this we recommended that this requirement should not be enforced but rather be given as an opportunity for households if they did not trust their contract parties. We were worried that this formalization requirement could increase the transaction costs in the land rental market and overburden the new local Land Administration Committees that are doing unpaid work and rather should focus their time on more important issues. It is therefore also good to see that this requirement is introduced in a soft way allowing that local bylaws are taken into account. In practice this appears to imply that sharecropping contracts among parties who trust each other are not registered and that is accepted. Again this is a good example of a rational and good adjustment of the policy and law enforcement.

Activity updatePosted by Stein Holden Sat, June 05, 2010 10:29:56Tigray is situated in the drier northern part of Ethiopia and belongs to the African Drylands in the Sudano-Sahelian region. The average annual average rainfall goes from 200 mm in the northeastern lowlands to 1000 mm in the southwestern highlands. High rainfall variability is one of the basic characteristics of the area, the Coefficient of Variation for annual rainfall is 28%, compared to 8% for Ethiopia on average.

Households have learnt to adjust to this risky environment over decades and centuries. When we think about possible future climate change and how best to respond, there is a lot to learn from studying existing responses to climate risks. Households have a number of well developed ex-ante as well as ex-post strategies to handle climate risk. However, with increasing population pressures some of these strategies are less efficient than before. Households have therefore become increasingly dependent on safety net programs and other institutional arrangements to reduce their vulnerability and harmful effects from climate shocks.

In our first baseline survey in 1998 we found that selling of livestock was their main response to climate shocks in form of droughts. Other commonly stated coping responses in decreasing order of importance included Food-for-work (FFW), borrowing from relatives, cash for work (CFW) and other employment locally or elsewhere in Ethiopia, and borrowing from others than relatives. Some stated that selling of trees was an important response. Very few stated that they would use cash or bank savings, beg for help from relatives or reduce expenditure.

However, their first response, selling of animals, is costly due to the covariate nature of such shocks. Livestock prices tend to decline substantially while food prices tend to go up. The total costs to the households are therefore much higher than the value of crop loss due to drought. Alternative buffer stocks or safety net or rainfall insurance systems may therefore be preferable. When we again asked about this in 2003 after a drought year, participation in Food-for-work had become their most important response to drought.

Investments that reduce the dependency on rainfall, such as irrigation, may also reduce the vulnerability. Improvement of roads also leads to better market integration and reduced local price volatility. Alternative savings mechanisms, like in credit and savings institutions do not have the same risk as saving in form of livestock. Several of our students will study a number of effects of climate risk, such as how it affects household subsistence production, asset dynamics, and consumption smoothing. This is also linked to how the productive safety net program helps households to protect themselves against these risks. Our 5-round household panel data is well suited for this type of analysis.

A rural health reform has been introduced in Tigray since 2006-07 by establishing health posts in every tabia (municipality). At each health post there is a female health extension agent who have received one year of training in advance. The reform furthermore includes a considerable number of health packages that are provided at tabia level where relevant. These include malaria prevention (where malaria exists), first aid, sanitation, environmental hygiene, personal hygiene, waste management, nutrition training, HIV/Aids testing and treatment. Treatment for most of the health problems is given free to households.

As an example of an impact, we found only in one of the 17 communities surveyed in 2006 that a small share of the households had dug toilets and this was under a pilot health project. Now, four years later this has been implemented in all communities. The same community where we found the pilot project now has 85% of the households covered with toilets. Now 15 tabias in Tigray have been declared as feces -free which requires that all households have dug toilets and environmental and personal hygiene have created a clean environment.

We found malaria to be a problem in 6 out of 17 sites in 2006 and we will resurvey these this year. At that time we found that insecticide-treated bednets had been distributed only in one of the locations where a severe malaria-outbreak came in 2005-06. All households then received free bednets. Under the new reform, all who are living in malaria-risk areas should have been given bednets. They say that there has been a reduction in malaria since then due to the bednets as well as treatment. They fear, however, that the reduced prevalence will cause households to stop using the bednets. This will be investigated by one of our students through our survey.

As the first region in Ethiopia Tigray implemented a broad-scale land registration and certification process in 1998 that was scaled up at a remarkable speed although it was not fully completed due to the war with Eritra. We have done many studies that document positive effects of this land reform. In 2006/2007 the Regional Land Law was again revised and new ambitious targets were set. The new implied establishment of Land Administration Committees (LACs) at tabia (kebelle) and kushet (village) levels. These committees should have 7 members and contain 2 female and 2 landless youth representatives. Furthermore, the new law required the establishment of new Tabia Land Courts with 3 judges of which one should be female. The LACs were responsible for local implementation of the new law. Some of the new elements of the law were:

a) Land should be taken from those who had been away from the community for more than 2 years and redistributed to other households, primarily to young landless households,

b) Minimum farm size should be 0.25 ha

c) All land rental contracts should be accepted and registered at the Tabia Land Administration Committee

d) Households should not rent out more than 50% of their land

e) Households should be encouraged to consolidate their holdings and would get new certificates after doing this.

f) Households are required to manage their land in a sustainable way. Failure to do so will lead to warnings and possibly fines and eventually the land will be taken if the requirement is not met.

We will with our survey this time be able to assess the effects of these law reforms, the extent to which they have been implemented, how well the local land administrations and land courts are able to deal with the issues, and how it effects our household sample.

We were informed in the Regional Environmental Protection and Land Administration and Use Authority (EPLAUA) that they have gone far in implementing the new law but there are also some elements that have not been implemented. In relation to point a) above: 32 000 households had their land taken in 2007/08, 30 000 households had their land taken in 2008/09, and so far in 2009/10 (EC2002) 16 275 households (6 110 ha land) have had their land taken for redistribution.

Registration of land rental contract has also been implemented but local bylaws are also coming into play in how this is done and punishment for not reporting is not generally introduced. Also for SLM, a stepwise approach is taken involving the Natural Resource Department and there are so very few cases of land takings.

Activity updatePosted by Stein Holden Mon, May 31, 2010 12:20:33Hosaena has gone the the field (Mahonee) with the enumerators while the Master students are preparing to join in for the fieldwork from tomorrow. Bethelhem Legesse is supposed to arrive from Addis today. Bethelhem Koru from Mekelle Univ. and previous MSc.-student in the program will also join in the fieldwork. I am working on editing and updating the survey instruments to fit them to the topics chosen by the students and to take into account new changes that are important to take into account. Hosaena came back from the field 10:30 last night (Sunday) and left again (05:00) this morning to follow up the fieldwork. I also stayed in the office the whole day and worked till late on the preparations, so we are not quite loafing around.... Now we hope also to get the students going so that the fieldwork is not delayed and data quality compromized. The students and enumerators will be divided in three groups to survey three villages at the time. Each village should take about one week. Some of them are really remotely located. Typically the local school is then used as the bedroom.

Teame (MSc-student) and I visited the Regional office for the Productive Safety Net Program this morning to get updated information on the program. They have just launched the new 5 year program with pretty much the same beneficiaries as in the first 5 years. 1.543 million persons are included in the new program. In Tigray 7093 household heads (16000 beneficiaries) have graduated from the (first), that is; achieved an income of 28000 Birr/person/year. These are located i 9 districts (woredas) in Central Zone of Tigray where there are irrigation projects and soils are better. There is a plan to graduate another 6% of the beneficiaries later this year.

A new thing in the new 5 year program is that households are offered to voluntarily participate in a household credit package program where they can get loans for 5 years to invest in livestock, petty trade or weaving. Under the old package the participation and type of credit was not volunatry and that caused problems for vulnerable households who failed to pay back the credit.